2017 (12) TMI 381 - AT - Central Excise

Jurisdiction - power of Additional Director General (DGCEI) to issue SCN - whether Additional Director General (DGCEI) is not the competent authority as per the ratio laid down by the Hon ble Delhi High Court in the case of Mangali Impex Ltd. Vs. UOI 2016 (5) TMI 225 - DELHI HIGH COURT ? - Held that - matter remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon ble Supreme Court decision in the case of Mangali Impex Ltd. and then on merits of the case but by providing an opportunity to the assessee of being heard - appeal allowed by way of remand.

Summary

Issues:
Jurisdiction of DRI Officers to issue show cause notice under the Customs Act.

Analysis:
The appeals were filed against a common Order-in-Original passed by the Commissioner of Central Excise. The primary issue in the present appeal was regarding the jurisdiction of the Directorate of Revenue Intelligence (DRI) Officers to issue show cause notices under the Customs Act. The appellant contended that, as per a Supreme Court decision, DRI officers were not proper officers under the Customs Act. Subsequently, amendments were made to the Customs Act in 2011, empowering the Additional Director General of DRI to issue demand notices under Section 28. However, conflicting views emerged from various High Courts on the issue. The Delhi High Court held that DRI officers were not empowered to issue show cause notices for the period before April 8, 2011. On the other hand, the Mumbai High Court and the High Court of Telangana and Andhra Pradesh took a contrary view. The matter eventually reached the Supreme Court, which stayed the Delhi High Court's judgment, indicating that the issue was sub-judice before the Supreme Court.

Further Details:
The High Court of Delhi, in a separate case, granted liberty to a petitioner to review the challenge depending on the outcome of appeals filed by the Union of India in the Supreme Court against the judgment of the Court in a related case. Following the Delhi High Court's decision in another case and considering the totality of facts and circumstances, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority. The Tribunal directed the authority to first decide on the issue of jurisdiction after the Supreme Court's decision and then proceed on the merits of the case, ensuring the appellant's right to be heard. The status quo was to be maintained until a final decision was reached. In alignment with the Tribunal's decision, the matters were remanded for a fresh decision, with the agreement of both parties, leading to the disposal of the appeals accordingly.